ASEAN ACCESS: A New Business Information Hub for MSMEs in ASEAN
On June 16, 2021, the ASEAN Coordinating Committee on Micro, Small, and Medium Enterprises (ACCMSME) launched ASEAN Access, a free information online portal dedicated to connecting micro, small, and medium enterprises (MSMEs) in the region as well as and expand their international market outreach.
The portal also helps businesses overcome the practical challenges associated with internationalization, by providing MSMEs the latest information on regional and international trade insights, trends, and business regulations in the region.
To help businesses mitigates the risk of entering a new market, the portal contains a ‘service provider’ section, a databank of service providers from the region. From here, businesses can find the necessary service providers relevant to their needs, whether it be business matchmaking, human resources and payroll services, and even translation services, among others. Registered users can download country profiles, sector briefs, in addition to details on the ASEAN regulations for goods and services to inform their market entry decisions.
This initiative was led by the ASEAN Coordinating Committee on Micro, Small, and Medium Enterprises (ACCMSME), an ASEAN body responsible for strengthening MSME participation in ASEAN integration and broadening and deepening their contribution to the bloc’s economic growth. The body hopes ASEAN Access will increase ASEAN’s MSMEs capacity and competitiveness in light of the tremendous trade opportunities offered by the regional economic community as they increase their participation in the regional and global value chain.
MSMEs are the backbone of ASEAN economies
MSMEs account for approximately 99 percent of all businesses and 80 percent of the workforce in ASEAN, making them the backbone of the economies of most member states.
As of 2019, intra-ASEAN trade accounted for 22.5 percent of total merchandise trade in the region. ASEAN was also the largest trading partner of China and the third-largest trading partner outside Europe of the EU (after China and the US) in 2020.
However, MSMEs in the region is prone to the challenges posed by globalization, technological advances, making them unsustainable. Furthermore, the ASEAN Economic Community (AEC) offers extra impetus for the promotion and development of MSMEs across the ASEAN bloc.
Many MSMEs also have limited access to information on the regional and international markets and the technical know-how of expanding their business overseas. This issue prevents MSMEs from taking advantage of the opportunities under the AEC and as a result, the export volume and revenue generated by regional MSMEs account on average for only 10 to 30 percent, for each country.
ASEAN countries are at varying degrees of their readiness in preparing for Industry 4.0 and building the MSME ecosystem in the region requires continuous reinvention.
Tackling informality is important for ASEAN, and member states are developing a package of policies promoting formalization, enhancing the tax system and labor regulations, as well as enhancing labor skills. According to the International Labor Organization, 68 percent of the employed population in the Asia-Pacific region are in the informal economy, or 1.3 billion people.
Indonesia has the largest workforce in the informal sector in ASEAN, comprising 60 percent of the total workforce — more than 64 million people. As such, better integration of the informal sector with the formal economy is necessary for the creation of a more active labor market, and competitiveness of local businesses.
Among the initiatives launched by the ACCMSME to address this is through the ASEAN SME Academy, which provides online learning tools developed by Fortune 500 companies to enhance SMEs ’ access to financial products, new technology, as well as advisory services.
Another initiative is the International Trade Centre (ITC) SME Trade Academy, which is a development agency dedicated to supporting the internationalization of MSMEs.
ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Da Nang in Vietnam, Munich, and Esen in Germany, Boston, and Salt Lake City in the United States, Milan, Conegliano, and Udine in Italy, in addition to Jakarta, and Batam in Indonesia. We also have partner firms in Malaysia, Bangladesh, the Philippines, and Thailand as well as our practices in China and India. Please contact us at firstname.lastname@example.org or visit our website at www.dezshira.com.